To be or not to be that is the question for whatever is to be is not to be that is the problem.

Disclaimer: I worked with several study groups (which had several different answers). I decided to go with this answer after many hours of hitting my head against the wall. I can t really say I understand this problem fully. 1) Sippican does need a new cost system. Sippican has calculated variable cost well but simply using variable cost for your cost system will lead to inaccurate outlook on their operations. They will not understand the profitability of their operation until they allocate both fixed and indirect cost. Specifically they need to account for indirect material and labor.

To be or not to be that is the question for whatever is to be is not to be that is the problem. Disclaimer: I worked with several study groups (which had several different answers). I decided to go with this answer after many hours of hitting my head against the wall. I can t really say I understand this problem fully. 2) Sippican does need a new cost system. Sippican has calculated variable cost well but simply using variable cost for your cost system will lead to inaccurate outlook on their operations. They will not understand the profitability of their operation until they allocate both fixed and indirect cost. Specifically they need to account for indirect material and labor.

3) Below

To be or not to be that is the question for whatever is to be is not to be that is the problem. Disclaimer: I worked with several study groups (which had several different answers). I decided to go with this answer after many hours of hitting my head against the wall. I can t really say I understand this problem fully. 4) Sippican does need a new cost system. Sippican has calculated variable cost well but simply using variable cost for your cost system will lead to inaccurate outlook on their operations. They will not understand the profitability of their operation until they allocate both fixed and indirect cost. Specifically they need to account for indirect material and labor.

5) Below

6) Below 7) Below
Case 18-4
Assembly & setup workers Excl setup focused Shifts nr Shifts time Employees/shift Production & assembly Setup Breaks Training & Education Preventive maintenance Productive time/day Avg working days/month Productive/month Total productive time Production & assembly Setup Valves 0.25 2 7.5 45 15 0.5 0.5 0.5 6 20 120 14400 10800 3600 Materials / unit Components/unit Nr of comp 1 Price of comp 1 Nr of comp 2 Price of comp 2 Nr of comp 3 Price of comp 3 Materials cost/unit Direct labor/unit Machine hours/unit Setup hours/run Production (units) Machine hours Production runs Setup hours Nr of shipments Hours of engineering work Direct labour Total nr of hours Total direct labour cost Setup hours Total nr of setup hours Total setup cost 4 2 2 2 6 Pumps 5 3 2 2 7 Flow controllers 10 4 1 5 2 1 8 22 0.4 0.3 12 4000 1200 225 2700 200 600 Time used Excess capacity

16 0.38 0.5 5 7500 3750 20 100 40 60

20 0.5 0.5 6 12500 6250 100 600 100 240

Full compensation/month (other than engineers) 3900 Total compensation 468000 Cost/hour Machines NR of machines Hours/shift Total nr of hours Operating expense Total per hour 32.5

62 6 14880 5400 22.5

2850 92625

6250 203125

1600 52000

10700

100 3250

600 19500

2700 87750

3400